For the 24 hours to 23:00 GMT, the EUR rose 1.91% against the USD and closed at 1.0755, as investors shrugged off the initial shock of a “No” vote in the Italian constitutional referendum, following the resignation of the country’s Prime Minister.
Gains in the Euro were boosted further, after the Euro-zone’s retail sales rebounded 1.1% on a monthly basis in October, growing at its strongest pace in more than two years. Markets anticipated retail sales to rise 0.8%, following a revised drop of 0.4% in the previous month. On the contrary, the region’s final Markit services PMI unexpectedly fell to a level of 53.1 in November, revised from a level of 54.1, recorded in the preliminary print and following a reading of 52.8 in the prior month. Additionally, the region’s Sentix investor confidence index surprisingly weakened to a level of 10.0 in December, compared to a level of 13.1 in the previous month and defying investor consensus for the index to rise to a level of 14.3.
Separately, Germany’s final services PMI surprisingly rose to a six month high level of 55.1 in November, offering further signs that the Euro-zone’s largest economy will rebound in the fourth quarter. The PMI recorded a level of 54.2 in the prior month, whereas markets expected it to remain steady at a level of 55.0, recorded in the preliminary estimate.
Macroeconomic data released in the US showed that the non-manufacturing PMI accelerated more-than-anticipated to a level of 57.2 in November, notching its highest level in thirteen-months, thus highlighting continuous growth in the nation’s biggest sector. The index had registered a reading of 54.8 in the prior month, while investors had envisaged it to climb to a level of 55.5. Meanwhile, the nation’s final Markit services PMI unexpectedly dropped to a level of 54.6 in November, compared to a flash reading of 54.7 and confounding market expectations of a rise to a level of 54.9. In the previous month, the PMI had recorded a reading of 54.8. Also, the labour market conditions index advanced to a level of 1.5 in November, after recording a level of 0.7 in the preceding month.
In the Asian session, at GMT0400, the pair is trading at 1.0753, with the EUR trading marginally lower against the USD from yesterday’s close.
The pair is expected to find support at 1.0593, and a fall through could take it to the next support level of 1.0434. The pair is expected to find its first resistance at 1.0854, and a rise through could take it to the next resistance level of 1.0956.
Moving ahead, investors will look forward to the Euro-zone’s final 3Q GDP accompanied with Germany’s factory orders and construction PMI data, all scheduled to release in a few hours. Moreover, the US trade balance, factory orders and final durable goods orders data, all due to release later today, would garner significant amount of market attention.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.